Area manufacturers gird for ‘gray tsunami’ of retirements
By Matt Glynn |
Patrick Barrett loves working as a machinist at Moog Inc. But at 33, he is among the younger people in his field at the Elma-based motion control company. With many co-workers in his department in their 50s and 60s, Moog faces a similar situation to other manufacturers: preparing for a wave of retirements in the near future.
Frank Hotchkiss, a Steelworkers union retiree who works on workforce development issues, said employers must confront the shortage.
“It’s just a simple matter of demographics,” he said. “As the workforce ages out, who do you have to replace them? And the people who are aging out are the people with the skills you need.”
A labor market study commissioned by Invest Buffalo Niagara, a business recruitment group, said that over the next decade, about one fifth of all jobs across the region could be impacted by retiring workers. Manufacturing could be among the hardest-hit sectors, because it has more older workers than almost any other industry in the region, and the smallest proportion of younger workers.
“This poses a threat to the industry, which will need to fill job openings and maintain operations and productivity over the next decade,” the report said.
A different study a few years ago estimated 17,000 manufacturing jobs in the region might have to be filled by 2020. Nationally, it’s projected 3.5 million additional manufacturing workers will be needed over the next 10 years, but that 2 million of those positions will go unfilled due to a lack of skilled workers.
How did the region end up in this spot? There is no single reason, but people familiar with the “skills gap” issue point to a few factors. Factory shutdowns of decades past made manufacturing a less-appealing career option. High schools have emphasized the college track for students over blue-collar careers. Meanwhile, as veteran workers march toward retirement, companies are scrambling for new hires.
“The skilled trades are going to be hit very hard in retirements, not just in manufacturing but also in construction,” said John Slenker, regional economist for the state Labor Department.
Bracing for ‘gray tsunami’
The Buffalo Niagara region in August had about 52,300 manufacturing jobs, which was 38 percent lower than 20 years ago, according to state figures. But after absorbing a powerful blow from the Great Recession, the sector has stabilized in recent years, and some manufacturers are hiring.
At the same time, employers are bracing for a “gray tsunami,” as a generation of skilled workers nears retirement age. Companies worry about where the next wave of workers will come from. And manufacturing is very much in the spotlight, as a sector the region has targeted for growth and a solar panel plant in South Buffalo launching production.
Barrett is part of that younger, albeit smaller, wave of workers. He was hired by Moog more than four years ago, after working at Wilson Greatbatch. Barrett makes aircraft parts, thriving on the attention to detail the work requires.
“You take a lot of pride in your part,” he said. “From seeing it at the beginning, you realize how important that is for the next guy” in the production process.
With retirements on the horizon, Moog is taking steps to bring more new people aboard, including using an in-house apprenticeship program that Barrett was once part of.
“I think they realize that because their workforce is becoming of age, they need to start investing in the younger people and pass on the tribal knowledge that the older guys have to the younger guys,” he said. By “tribal knowledge,” Barrett means what someone gains from doing the job and working alongside experienced people.
Big companies like Moog, as well as small manufacturers like Schutte-Buffalo Hammermill, face a common challenge: finding workers to hire who have the right skills. Employers say they need to fill openings created by growth or retirements, but the pool of skilled candidates is not as deep as decades ago. The Buffalo Niagara region is facing a wave of manufacturing retirements, coupled with fewer workers ready to replace them.
Don Davis, talent acquisition manager for Moog, said these types of manufacturing jobs have staying power.
“There’s a career there for longevity,” he said. “You can write your ticket for a long time. If you’re a good machinist, you’re never going to be out of work.”
And Moog, which has operations around the world, keeps on growing. The company has two local expansion projects in development.
Attempts to close gap
At Schutte Buffalo Hammermill, owner Martin Berardi walks the shop floor and points out longtime employees who have a wealth of experience. The company produces size-reduction equipment: customers buy these machines in order to grind up material for other uses, like animal feed and wood pellets. He bought the business nearly three years ago.
Berardi has his own approach to solving his workforce needs: identify good prospects, hire them and develop them. Otherwise, he said, “you’re waiting for that person who’s ready who’s not available, or might be the commodity that 15 companies are looking for and you don’t get it, and then what do you do?”
Schutte Buffalo Hammermill owner Martin Berardi has his own approach to solving his workforce needs: identify good prospects, hire them and develop them. (Derek Gee/Buffalo News file photo)
It’s not that these jobs don’t pay well. The state Labor Department says the “experienced wage” – the average of the top two-thirds of wages in a given occupation – for tool and die makers in the region is about $63,000. For electricians, it’s nearly $70,000, and for millwrights, the experienced wage is almost $73,000.
People with a stake in the issue are attempting to close the skills gap, in different ways.
A prominent example: the $58 million Western New York Work Force Training Center and small business center, taking shape on Northland Avenue on the East Side. The Buffalo Billion project will revitalize a dormant manufacturing site, providing training to low-income and disadvantaged residents in an economically struggling part of the city.
The Buffalo Niagara Manufacturing Alliance is one of four partners responsible for the center. Peter Coleman, the alliance’s president, said he hopes the center’s programs will create a more diverse pool of candidates for manufacturers that will include minorities, women, veterans, refugees and immigrants.
“You can make a very good wage and benefit and do very good work in the industrial work force. But it’s almost become unfashionable for young people to go into this line of work,” says Peter Coleman, executive director of the Buffalo Niagara Manufacturing Alliance. (Robert Kirkham/Buffalo News file photo)
The top concern
Coleman said he will know the region is making headway on the workforce issue when his group’s members stop citing it as their No. 1 concern. “We need the workers, and the demand is there,” he said.
About 80 percent of the nation’s manufacturers have 20 employees or less, so the skilled worker shortage is especially acute for smaller companies, which have limited resources to recruit and train workers, Coleman said.
“It costs a lot of money to train a worker,” he said. “You don’t want to lose them, either.”
People working on the skills gap issue say they have to overcome perceptions about the availability of manufacturing jobs and working conditions. They are pushing back against outdated images of factories as dingy, low-tech places with dead-end careers.
“There’s a feeling that these are not reasonable careers to have, but in reality, they are,” said Richard Lipsitz Jr., president of the Western New York Area Labor Federation. “You can make a very good wage and benefit and do very good work in the industrial workforce. But it’s almost become unfashionable for young people to go into this line of work. And there’s not preparation made in the schools the way it should be.”
Programs like “Dream It, Do It” give young people a current view of manufacturing jobs, to expose them to those careers. Tours of plants like General Motors’ engine plant in the Town of Tonawanda showcase a high-tech setting students may not have pictured. And some big-name manufacturers, including GM’s two area plants and Sumitomo’s tire plant, are investing in their operations.
Hotchkiss, of the Steelworkers, said manufacturing jobs tie into a high priority in education: promoting what are popularly called STEM careers.
“You can’t be an electrician or a metal fabricator or a welder or [in] any other trade, without understanding the basics in these areas: science, technology, engineering and math,” he said. “So I keep telling people, it’s not advanced manufacturing. We’re talking about manufacturing, period. There’s no real distinction, because if you’re not an advanced manufacturer, you’re not going to be in business.”
Meanwhile, employers are dealing with immediate needs to find the right people to hire.
Davis said when Moog hires machinists, the company prefers people with at least five years’ experience, rather than someone fresh out of school. “That becomes a little more of a challenge, because if they’re good and they’ve got five years’ experience, they’re employed. There’s not a lot of those folks floating around.”
He keeps tabs on employers that might have layoffs, and asks machinists whom Moog hires if they know any other potential candidates.
Berardi, at Schutte Buffalo Hammermill, said he has his own approach to getting the workers he needs.
“What you need is more people who have the basic fundamentals of how to work in a factory, and a willingness to want to take a job that is stable, in most cases, a reasonable wage with some benefits,” Berardi said. “And you don’t have to have this huge amount of expense associated with student loans to get there.”
Berardi said he looks to hire people who can drive a fork truck and have some basic welding skills and a commitment to come to work consistently. While he thinks advanced manufacturing firms have their place, he doesn’t want small, traditional manufacturers to be overlooked when it comes to allocating training dollars and nurturing job growth among companies with less than 50 workers.
“I just think the investment in manufacturing needs to be driven down a couple of layers into each company’s training programs or apprenticeship programs,” Berardi said. “If the money’s not driven there, you’ve got to invest it on your own. That’s the way to fill it, as far as I’m concerned.”
Apprenticeships are another path for developing young talent.
The United Way of Buffalo and Erie County in 2015 received a $3 million federal grant aimed at funding 300 apprenticeships in advanced manufacturing over a five-year period. The United Way’s American Apprenticeship Initiative is working with 11 companies so far, including Ford Motor Co., Cummins Inc. and Xylem. Others are feeling out whether an apprenticeship is right for them.
“It was such an important part of the strength of manufacturing in the past,” said Holly Hutchinson, project director of the initiative at the United Way. “But it’s been a while since apprenticeship has been understood that way, so there’s a learning curve that we’re all going through in the area to see the value of it.”
Apprentices are getting trained for careers including electricians, welders, millwrights and machine repair.
In some cases, companies will choose a person who is already an employee for an apprenticeship. The employer already has a sense of that person’s work habits and abilities, which is valuable knowledge to have at the outset. “It’s a big commitment on the part of the employer and the apprentice,” Hutchinson said.
While some manufacturers struggle to fill manufacturing jobs, economist Jim Glassman of JP Morgan Chase said he actually takes those complaints as a hopeful sign.
“That just tells me that it’s not going to be long before people figure out where the jobs are,” he said. “There are a lot of efforts going on to improve people’s skills, and they’re good-paying jobs. So I bet five years from now, we’re not talking about this issue as much.”